Senate hearing Wednesday on property tax relief bill

Supporters of property tax relief for Pennsylvania homeowners hope it might be a step closer to reality following a Senate hearing set for Wednesday.

The state Senate Finance Committee will examine SB76, a bill to replace the bulk of property taxes with higher sales and personal income taxes.

It's the second hearing for the bill before the committee.

A similar bill in the house, HB 76, failed to pass after the independent fiscal office reviewed the legislation and said that it didn't generate enough revenue to totally eliminate school taxes.

Since then, senators have taken up the cause with changes to the bill to address the fiscal office's concerns.

“Now that all the changes been made, we want to see what comments the senators have,” said state Rep Mario Scavello, R-176.

The new bill, called The Property Tax Independence Act, shifts revenues from taxing homeowners based on the value of their homes with a 1 percent increase in the sales tax — from 6 percent to 7 percent — and a 1.27 percent increase in the state's personal income tax rate.

The rate is now 3.07 and would rise to 4.34 if the legislation were to be approved under the current bill.

The bill also taxes some previously untaxed goods and services, including clothing and footwear that costs more than $50, basic TV service, and parks and veterinarian fees. Some professional services will also be taxed, including legal, architectural and engineering.

“The people of our area need this tax switch to make their school taxes more affordable,” said state Rep. Rosemary Brown, R-189. Brown, along with Scavello, voted for the failed House version of the bill.

“The hearing allows for the prime sponsors of the bill, state Sens. David Argall, R-29, and Mike Folmer, R-28, to clear up any misconceptions and, answer questions and concerns on SB76 so we can gain as much support as possible from the legislators,” Brown said.

The proposed law, should it pass both legislative bodies, won't eliminate property taxes altogether. School districts can still tax property owners for the debt each carry.

Even if passed, tax relief won't be immediate.

“If they move the bill, this is not going to be in place for this year's property tax bill,” Scavello said.

If it passes the Senate, the pressure will be on the House to act on it.

“If the Senate passes it,” Scavello said, “I think it has a chance.”

The Property Tax Independence Act will also continue to draw education funding from the gaming industry, money that's currently credited to each property owner's tax bill annually.

“We know the Property Tax Independence Act will work because it incorporates the analysis completed by the Independent Fiscal Office,” Scavello said.

The Senate hearing will be held at 9:30 a.m. Wednesday in Hearing Room 1 in the North Office Building in Harrisburg.

It will also be streamed live at http://bit.ly/1rxv0SY or on Brown's website.

The Pennsylvania Association of Realtors and homeowners will rally in support of the bills on the front steps of the capitol at 11:30 a.m.